Frequently Asked Questions.

A Stakeholder or personal pension is a tax-efficient way of investing for your retirement.
You can contribute to a pension if you’re employed, a fixed-contract worker, self-employed, or even not working but able to afford the contributions.
You can get one from a bank, building society, insurance company, or through a financial adviser. You can pay contributions regularly which are invested to build up your own pension fund. You can also make lump sum contributions whenever you like and transfer pension funds into your plan from other UK Registered Pension Schemes or from overseas pension schemes.

When you take your benefits, you can use your pension fund to buy a ‘pension annuity’. This will pay you a regular income for the rest of your life. How much you'll be paid will depend on a number of factors including the size of your fund and the annuity rates at the time you take your benefits.

When you take your pension income you can normally choose to have up to 25% of your fund as a tax free cash lump sum.

You can read more about our annuities here.

Stakeholder pensions were introduced by the Government in April 2001. Their purpose is to encourage more people to save for their retirement by offering a simple, low cost and flexible personal pension.

Stakeholder pension plans, like other pension plans, are tax efficient. Here's how:

• You’ll normally receive tax relief on the money you pay into your pension plan (called 'contributions').  You can make gross contributions up to 100% of your relevant UK earnings or £3,600 if greater each tax year and still get full tax relief. So, for every £80 you put into your Stakeholder pension plan, HM Revenue & Customs (HMRC) will pay in an additional £20, even if you don't pay tax at all. These figures assume basic rate tax is 20%.
• If you are a higher rate tax payer, you can claim any additional tax relief through your self-assessment tax return.
• Any growth in your Stakeholder pension fund is free of UK income tax and capital gains tax. However, we cannot reclaim the tax paid on dividends from UK companies.
• The law and tax rates may change in the future, and the value of tax relief depends on the circumstances of the individual investor.

You can apply for a Stakeholder pension online but before you do, you must read the following documents. If you don't understand any point, please do not hesitate to contact us for further information.

• Stakeholder key features (pdf 170 KB)
• Choosing your investment fund (pdf 142 KB)

You can print them and keep for future reference. We also recommend that you read the Financial Services Authority's decision trees. This is an interactive online service designed to help you make sure that a Stakeholder pension is right for you.

If you’re ready to invest you can do so by calling 03459 932 584 or apply online. Call charges will vary. We may record and monitor calls.

To have a Stakeholder pension, you must be under 70 and normally a resident of the UK or a Crown servant or the spouse or registered civil partner of a Crown servant.
You can also open a Stakeholder pension on behalf of a child. See 'How could my family benefit from a Stakeholder pension?'

Stakeholder pensions are very flexible.

• You can pay in as little as £20 gross (which includes the tax relief paid by HM Revenue & Customs).
• You can pay contributions on a regular basis or make occasional lump sum payments.
• You can stop, start, increase and decrease your payments as well as pay in lump sums without penalty.
• You can transfer pension funds into your plan from other UK Registered Pension Schemes or from some overseas pension schemes.

There are certain limits on how much you can pay in and get tax relief on:

• You can make gross contributions of up to 100% of your relevant UK earnings or £3,600 if that’s greater, in each tax year, and still get full tax relief. The law and tax rates may change in the future and the value of tax relief will depend on your individual circumstances.
• If total contributions paid by you or on your behalf exceed an amount known as the Annual Allowance (£255,000 in the 2010/2011 tax year) then HM Revenue & Customs will impose a tax charge of 40% on the excess contribution. However the Annual Allowance won’t apply in the tax year when you take all your benefits.
• Even if you’re already paying into an occupational pension scheme, you can also have a Stakeholder pension plan.

'Relevant UK earnings' means all of the earnings that count towards the amount that you can contribute to a personal pension.

This includes your salary, bonuses, tips, overtime and benefits in kind. In fact, most sources of income that are taxable. The main exclusions to this are income from pensions, State benefits, and certain controlling director payments.

There are no restrictions on the value of the total benefits payable from all your UK Registered Pension Schemes. However, if the benefits payable exceed a level called the Lifetime Allowance, the excess will be subject to a tax charge of up to 55%.

The standard Lifetime Allowance is currently £1.8 million and will remain at that level for all tax years up to and including 2015/2016.

In certain circumstances you may be entitled to an increased Lifetime Allowance. This is known as a personal Lifetime Allowance.

Our contributions calculator can help you work out how much income your pension contributions might give you when you take your benefits.

It's wise to regularly review how much you’re putting into any pension plan. Many people choose to gradually increase their contributions as they can afford to and as their earnings rise.

The value of the units that make up your pension fund can go down as well as up, so the value of your pension fund is not guaranteed.

It’s particularly important to remember this if you’re close to taking your pension benefits. You also need to remember that your money is tied up until you take your benefits.

Once your pension plan is up and running with us we’ll send you an annual statement on the anniversary of your plan.

This will tell you how much you’ve paid in during the last year and the current value of your pension fund. You should read this statement carefully.

Stakeholder pension plans are designed to be low cost. There are restrictions in place to ensure that this is the case.

• The Government's maximum permitted annual management charge for Stakeholder pensions is currently 1.5% a year of the value of your pension fund for the first 10 years of your pension plan and 1% a year after that. Compared with this, our current charges for online applications provide great value for money.
• Please refer to the key features for more information.

You can choose from a wide range of pension investment funds with us, each has varying levels of risk and potential reward.

You can also switch your investment from one fund to another, currently free of charge, meaning you can easily change your Stakeholder Pension investment choices.

We offer over 20 pension investment funds to invest in, ranging from index-tracking funds (which track the performance of a market or geographical region) to actively managed investment funds (where a fund manager decides what to invest in, in order to best achieve the fund's aims).

Or, there are 17 funds from a set of specially selected external fund managers. You can also choose to invest in a Lifestyle Profile.

When setting up a Stakeholder pension you have the option of choosing a Lifestyle Profile.

This is where your contributions are initially invested in funds for the potential of long-term growth and then your investment is steadily switched into lower risk funds as you get nearer to your chosen retirement age.

All investments carry an element of risk. Some of the risks are listed below. Please read the Key Features document (PDF 99KB) for further information.

You need to consider that the value of the units, which make up your fund, can go down as well as up, so the value of your fund is not guaranteed. This is especially important when you’re close to your chosen retirement age and may want to take less risk on your pension fund.

The amount of pension income provided by your pension fund will depend on a number of things, including investment returns and the rates available to buy your pension when you decide to take your benefits.

The fund or funds you choose to invest in will have specific risks. These risks are described in the Choosing your investment fund document (PDF 89KB).

When you take your benefits you can normally take up to 25% of your pension fund as a tax free cash sum. The remaining money will be used to provide a retirement income, for example by buying a pension annuity. This income will be taxable. You can buy a pension annuity from us or from another provider. You can read more about our annuities here.

Your retirement age must be between 55 and 75. The pension income from your Stakeholder pension will depend on a number of things which will include how much you contribute, charges, investment returns over the period your contributions are invested for, your age and the financial market conditions when you take your benefits.

Before you decide to transfer from another pension plan we’d recommend you get financial advice first.

You need to consider if a transfer is to your advantage, so you need to look at several factors such as charges, investment choices and any guarantees that may be lost.

If you’re looking for advice on transferring a pension fund into your existing Legal & General Stakeholder plan you can contact our employed sales advisers on 0800 316 8540.

This is a free phone number, however if you call using a mobile phone your mobile phone operator may charge you to use this number. We may record and monitor calls.

Our team of dedicated employed sales advisers are authorised to advise only on our life insurance, pensions and investment products.

Or you can find an independent financial adviser (IFA). An IFA is a person who is not tied to any one financial institution and is qualified to give financial advice on life insurance, pensions, investments and other financial products.

You may be able to pay up to £3,600 gross each tax year into a Stakeholder pension plan for your partner (regardless of whether they are working). This means they will have their own pension income when they take the benefits.

You could also start a Stakeholder pension plan for your children or grandchildren. Investing in one of our Stakeholder pensions on behalf of a child is a great way to help provide for your child’s future.

You can see how much your child's pension plan could be worth at retirement age by using our Stakeholder calculator for children.

You can manage your Stakeholder pension online so that you can see how your pension investment fund is performing.

You can also change funds, currently free of charge.

You may also benefit from lower charges when you apply for our Stakeholder pension online.

After reading the documents that make up the key features, it takes just 20 to 30 minutes to complete your application.

You can apply online today.

We offer a wide range of pension products, which may be suitable for your individual needs. These include a Self Invested Personal Pension (SIPP) and Personal Pension (PP).

If you would like to find our more about a SIPP or a PP please contact us on the number opposite, visit www.unbiased.co.uk, or contact your Independent Financial Adviser (IFA).